Tuesday, March 30, 2010

News from Today effecting the Financial Sectors ; $C $GS $MS ; Banks


         Financials: Ahead of Volcker's speech at 12:30, the group is leading the tape lower, with weakness especially being seen in banks and large cap brokers. Possible quarter-end rebalancing between outperformers and underperformers is being cited for weakness in the group as well. In this holiday shortened week, volumes and flows are heavier today than yesterday but should fade into week-end. HFs continue to be our most active players on the desk, but have a more balanced approach today than they have been in the recent past (sell skew). We're not seeing shorts being pressed into the weakness, however the buying feels primarily like short covering on weakness. Eyes will remain focused on macro factors (Greece, financial regualation, employment) for the rest of the week before turning moreso towards earnings. Expect earnings previews for banks, as well as possible pre-announcements, to come in the next week.

         Brokers – some selling in MS and GS ahead of the Volcker speech @ 12:30pmET.  Also some worry that UBS FI strength came at the expense of peers (given overall market volumes were on the light side)  Electronic guys act a bit better – AMTD, SCHW, ETFC are outperforming. 

         Banks – C continues to come for sale (off another 2%) as people remain disappointed w/the Treasury sale (some hoping for a large single discounted secondary).  Regionals are lower, although selling on the benign side (BBT, CMA, PNC, MI, RF lagging in regionals while CYN, KEY, USB outperform). 

         C – from DJ - Some $5 billion in reverse inquiries to buy Citigroup Inc. (C) stock were fielded by Morgan Stanley (MS) Monday from money managers, CNBC's David Faber reported Tuesday, citing people familiar with the situation. The Treasury Department Monday said it had hired Morgan Stanley to manage the sale of the government's 27% holding in the bank, worth about $33 billion. The stake sale reportedly is to take place over about six months.

         Best Performing sp500 financials: ETFC, AMP, AIV, HST, IVZ, BXP

         Weakest performing: C, PFG, PNC, DFS, PLD, GS, BAC, SLM, MS, TRV

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